While 2021 saw a huge year for NYC real estate buyers and sellers, the sentiment for 2022 seems does not seem so cheery. Growing and sustained inflation are making buyers a bit more cautious and a new hike in mortgage rates from an average of 3% to 3.4% has brought added trepidation to pull the trigger on new offers. In my own business, I have noticed prices far outpacing buyers expectations and some listings going off market for the 1st quarter of 2022.
The rental market in Brooklyn and Queens has been precarious as well in Q4 2021 leading into Q1 2022. Many who moved back to the city are still in their new leases and the rental community in general seems a bit older >30 and less apt to move so quickly. It also seems many younger New Yorkers <30 who moved away from the city during the pandemic and have not returned. In my own experience, younger renters tend to move more readily than older renters, which opens up more vacancies. This appears not to be the case right now.
Additionally, many new rental developments being completed here in Greenpoint and Long Island City over the last year have driven up rental prices dramatically in these historically sleepier neighborhoods. Dutch Kills in Queens is a great example of this. I recently rented a true three bedroom apartment on the Astoria/Long Island City border with a garage for $3,400 per month. As I looked for comps in the market including Dutch Kills, LIC which borders Astoria, I could not find any at that price point. In general, three bedrooms in the Court Square, Dutch Kills area of LIC are now starting at $6,000 per month!
What does this say about the market in general for LIC and Greenpoint? First and more obviously, individuals and families with larger annual incomes are able to stay closer to the city. BUT there is a double edge! Many >30 are hoping to save so they can buy something in the area and this remains difficult when paying $5K plus per month in rent and a housing market is still too high for those younger families looking to buy something large enough to accommodate a growing family. These families are stuck living in smaller apartments while saving to make a push to buy! The result has been that younger first time home owners are moving to Westchester, Long Island, and New Jersey as an alternative. Whether this trend continues remains to be seen.
Alternatively, The younger renting crowd who are moving back to the city and just starting out in their professional careers will most likely have more success by expanding their search further out into neighborhoods like Sunnyside, Woodside, and Ridgewood, Queens. This is true for both renters and buyers. I am a Zillow Premier Agent for area code 11385 which covers Ridgewood and Glendale Queens including parts of Bushwick, Brooklyn and am seeing this as a growing trend for first time buyers who have previously rented in Williamsburg and Greenpoint especially.
The housing migration stated above seems to be true for both renters and buyers. The pricing climate in Ridgewood is close to where pricing was in Greenpoint and parts of Williamsburg in 2017. That is how quickly things can change in the Brooklyn/Queens real estate market. While sellers and landlords expectations remain at 2017 levels in many cases, in part do the the short burst in pandemic activity in 2021, the market now seems to be reverting back to a slower price acceleration curve. I will have a better idea of where the market is headed in my next report. Stay tuned!
Alan Lupiani is a Licensed Real Estate Salesperson at Modern Spaces in Long Island City. He works mainly on real estate rentals and sales in Queens and Brooklyn. He also has commercial leasing experience. Please feel free to reach out to Alan @ alan@modernspacesnyc.com or contact him directly at 917.613.8135 for any of your real estate needs.
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